In pursuit of the physiological role of inositol 1,3,4,5-tetrakisphosphate 3-phosphatase, which also attacks inositol pentakisphosphate and inositol hexakisphosphate with much higher affinity (Nogimori, K., Hughes, P.J., Glennon, M.C., Hodgson, M.E., Putney, J.W., Jr., and Shears, S.B. (1991) J. Biol. Chem. 266, 16499-16506), we have studied the subcellular distribution of the enzyme in liver. Initially, we had to overcome the problem that potent endogenous inhibitor(s) compromise the detection of this enzyme in vitro (Hodgson, M.E., and Shears, S.B. (1990) Biochem. J. 267, 831-834). We partially purified these inhibitor(s) by anion-exchange chromatography and gel filtration; inhibitory activity co-eluted with standard inositol hexakisphosphate and was depleted by treatment with phytase. Thus, subcellular fractions were pretreated with phytase before assay of 3-phosphatase activity. Our experiments revealed that the hepatic 3-phosphatase was nearly exclusively restricted to the endoplasmic reticulum, and there was little or no activity in either the cytosol, plasma membranes, mitochondria, or nuclei. Detergent treatment of microsomes indicated that there was 93 +/- 2% latency to mannose-6-phosphatase, an intraorganelle enzyme activity (Vanstapel, F., Pua, K., and Blanckaert, N. (1986) Eur. J. Biochem. 156, 73-77). Similar latencies were found for the hydrolysis of inositol 1,3,4,5-tetrakisphosphate (95 +/- 1%), inositol 1,3,4,5,6-pentakisphosphate (94 +/- 1%), and inositol hexakisphosphate (93 +/- 2%). Treatment of microsomes with either sodium carbonate or phosphatidylcholine-specific phospholipase C, to release luminal contents, led to solubilization of approximately 90% of 3-phosphatase activity. Thus, hepatic 3-phosphatase has a highly restricted access to inositol polyphosphates in vivo that needs to be accounted for in the determination of the physiological role of this enzyme.